The popular 'Where's My Refund' tool is back this year, with improvements. You can check online to see when your refund was approved and when it was issued.
If you’re already filed your tax return, you likely have one important question: Where’s my refund?
The IRS, once again, has an app for that. The agency's popular Where's My Refund website tool is back for 2013, with a few improvements. Last year, you could get an estimate of when you could expect your refund. This year, the tool will tell you the date your tax return was received, the date your refund was approved and the date the check was sent or the funds were transferred to your bank. From that point, it’s up to the financial institution and the U.S. Postal Service how quickly you’ll receive your money.
If you had debt canceled last year, perhaps through a foreclosure or short sale, you probably received a 1099-C listing the canceled debt as income. Here's how to cope.
This post is by Gerri Detweiler of Credit.com.
"What is a 1099-C?" That’s the question millions of taxpayers will be asking as these forms land in their mailboxes. An estimated 5.5 million 1099-C forms will be filed for the 2012 tax year.
If you received one of these forms, your first reaction may have been panic. "Why did I get this?! What does it mean?!" Then you probably starting searching online to learn more — and that’s what brought you here. So let’s get started.
What is a 1099-C?
A 1099-C reports Cancellation of Debt Income (CODI). A lender is supposed to file a 1099-C form if it "cancels" $600 or more in debt. It files a copy with the IRS and is required to send a copy to the taxpayer as well.
Taxpayers can make IRA contributions for 2012 until they file their taxes. Those who meet income requirements can get a tax credit.
This post is by Sandra Block of Kiplinger's Personal Finance magazine.
As you tackle your 2012 tax return, make sure you haven’t overlooked one of the best ways to cut your tax bill and secure your future -- funding a traditional IRA. (There is no upfront tax break for funding a Roth IRA.)
You can make a 2012 IRA contribution up until the time you file your tax return, due April 15, 2013. Depending on your income, you may be able to deduct your IRA contribution even if you or your spouse is covered by another retirement plan at work.
To contribute to a traditional IRA, you or your spouse must have earned income from a job and be younger than 70½.
If you're self-employed or freelance on the side, you should have received 1099s from all your clients by now. If those numbers are wrong, it's important to have them corrected.
This post is by Robert W. Wood of Forbes.com.
But what if you receive a Form 1099 you know to be wrong? Say you’re paid a consulting fee of $30,000, but the 1099 you receive is for $300,000. What should you do?
Promptly contact the issuer, show you really were paid $30,000, and ask the issuer to reissue it correctly. Ideally, do this before the issuer sends the 1099 to the IRS. Forms 1099 should be sent to taxpayers by Jan. 31 and to the IRS by Feb. 28. So if you call and write the issuer of the 1099 as soon as you receive it, the issuer may be able to simply destroy the incorrect one and issue a new one.
In 21 states and the District of Columbia, you may owe estate and inheritance taxes to the state even if you don't have to pay the federal government.
For the unwary, state estate and inheritance taxes can come as a big surprise. That’s going to be especially true as families think they can get away without planning now that the federal estate tax hits only individuals who die with more than $5 million in assets ($5.25 million for 2013, indexed for inflation). But according to Forbes, 21 states and the District of Columbia have estate and/or inheritance taxes on the books for 2013, and in some cases they kick in on the first dollar.
"The thing that makes state estate tax so sinister is it’s underneath people’s radar, but it’s got a sharp bite," says Martin Shenkman, an estate lawyer in Paramus, N.J. "If you have under $5 million, you’re not necessarily out of the woods."
Volunteers nationwide provide free assistance to taxpayers who need help with their returns, and many Americans qualify. Here's how to find help in your city.
This post is from Dawn Papandrea at Living on the Cheap.
Even if you’re expecting a tax refund, this time of year can be, well, taxing on your wallet when it comes to paying for tax preparation services. In fact, according to a National Society of Accountants survey, hiring a tax return preparer cost an average of $246 for an itemized Form 1040 with Schedule A and a state tax return in 2012. That can be a lot of money for someone on a fixed income.
The good news is that, if you qualify, you can get free help filing your return and not spend a dime.
Here are some programs to investigate.
The fiscal cliff deal restored a tax benefit for commuters who use mass transit, making it worth the same as a tax break for those who drive and park.
This post is by Ashlea Ebeling of Forbes.
There's good news for train, subway and van pool riders hidden in the 157-page fiscal cliff deal -- an extension of pretax benefits for transit commuters on par with parking benefits. That means $550 and up a year in tax savings per commuter, retroactive to 2012. An estimated 2.7 million families (mine included) will gain from this break.
"It's significant pocketbook relief," says Steven Higashide, federal advocate for the Tri-State Transportation Campaign, a watchdog group that advocates for environmentally sustainable transportation for hundreds of thousands of commuters in New York, New Jersey and Connecticut. "Not having parity between transit and parking is completely backwards, and it’s great news that Congress has fixed this (through 2013)," Higashide says, adding, "We certainly shouldn’t be encouraging driving over public transit through the tax code."
That’s been the rallying cry of those pushing to restore the transit parity provision that began in 2009 but expired at the end of 2011.
The alternative minimum tax, designed to make sure wealthy individuals paid their share, now ensnares the middle class in paperwork -- and sometimes higher taxes.
This post is by Kay Bell of Bankrate.com.
These folks are simply trying to use the tax code, legally, to lower their annual Internal Revenue Service bills. They claim exemptions for eligible dependents, deduct the interest on their mortgages and associated equity loans, and write off the state income taxes they pay. Some of these tax breaks, however, will do them no good under the alternative minimum tax system.
Commonly referred to as the AMT, this tax has its own set of rates (26% and 28%) and requires a separate computation that could substantially boost your tax bill.
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